One policy response to the U.S. economic slowdown of 2001 was to increase money growth. This policy response can be represented in the IS-LM model by shifting the ______ curve to the ______.
A) LM; right
B) LM; left
C) IS; right
D) IS; left

Question

Quizplus · Accepted Answer

In the IS-LM model, increasing money growth shifts the LM curve to the right, as it represents an increase in the money supply and lower interest rates. This can help stimulate spending and investment, which can help to combat an economic slowdown. Therefore, the correct answer is A, LM; right.

One Policy Response to the U